MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 16.A, Problem 8SQ
To determine
The Keynesian policy when the economy experiences a recessionary gap.
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Students have asked these similar questions
In the Keynesian framework, for each of the following events which might cause a recession and/or inflation? Explain using Aggregate Demand/ Aggregate Supply.
a. A large increase in the price of the homes that people own
b. Rapid growth in the economy of a major trading partner
c. The development of a major new technology offers profitable opportunities for business
d. The interest rate rises
e. The good imported from a major trading partner becomes much less expensive. 
In the Keynesian model, which of the following events lead to an increase in aggregate demand?
(This is a multiple answer question. One of more options may be correct)
a.
An increase in the sales tax
b.
A new infrastructure project by the Federal government
c.
An increase in value of the Euro relative to the US-Dollar
d.
A drop in business confidence.
When in macroeconomics an economy ‘overheats’ it is observed that aggregate demand exceeds national income at the full employment output level. Within a ‘Keynesian cross’ framework this overheating is described as which of the following:
(a) A Goldilocks effect;
(b) A hyperinflation;
(c) A recessionary gap;
(d) An inflationary gap
Please illustrate the correct answer via a diagram.
Chapter 16 Solutions
MACROECONOMICS FOR TODAY
Ch. 16.3 - Prob. 1.1YTECh. 16.3 - Prob. 2.1YTECh. 16.3 - Prob. 2.2YTECh. 16.A - Prob. 1SQPCh. 16.A - Prob. 2SQPCh. 16.A - Prob. 3SQPCh. 16.A - Prob. 4SQPCh. 16.A - Prob. 1SQCh. 16.A - Prob. 2SQCh. 16.A - Prob. 3SQ
Ch. 16.A - Prob. 4SQCh. 16.A - Prob. 5SQCh. 16.A - Prob. 6SQCh. 16.A - Prob. 7SQCh. 16.A - Prob. 8SQCh. 16.A - Prob. 9SQCh. 16.A - Prob. 10SQCh. 16.A - Prob. 11SQCh. 16.A - Prob. 12SQCh. 16.A - Prob. 13SQCh. 16.A - Prob. 14SQCh. 16.A - Prob. 15SQCh. 16 - Prob. 1SQPCh. 16 - Prob. 2SQPCh. 16 - Prob. 3SQPCh. 16 - Prob. 4SQPCh. 16 - Prob. 5SQPCh. 16 - Prob. 6SQPCh. 16 - Prob. 7SQPCh. 16 - Prob. 8SQPCh. 16 - Prob. 9SQPCh. 16 - Prob. 10SQPCh. 16 - Prob. 11SQPCh. 16 - Prob. 12SQPCh. 16 - Prob. 1SQCh. 16 - Prob. 2SQCh. 16 - Prob. 3SQCh. 16 - Prob. 4SQCh. 16 - Prob. 5SQCh. 16 - Prob. 6SQCh. 16 - Prob. 7SQCh. 16 - Prob. 8SQCh. 16 - Prob. 9SQCh. 16 - Prob. 10SQCh. 16 - Prob. 11SQCh. 16 - Prob. 12SQCh. 16 - Prob. 13SQCh. 16 - Prob. 14SQCh. 16 - Prob. 15SQCh. 16 - Prob. 16SQCh. 16 - Prob. 17SQCh. 16 - Prob. 18SQCh. 16 - Prob. 19SQCh. 16 - Prob. 20SQ
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Similar questions
- Select all that apply to a Keynesian Economist: A. Assumes flexible demand for output B. Savings depends on income C. Investment depends on profit expectations D. Wages sticky E. Fix in Short Runarrow_forwardThe Keynesian model suggests that .... should be preferred over .... since the ..... is larger than the ..... a. fiscal policy / monetary policy / unplanned changes in inventories / marginal propensity to consume. b. fiscal policy / monetary policy / impact of money supply / marginal propensity to consume. c. government sprending / tax cuts / tax multiplier / government-spending multiplier. d. government sprending / tax cuts / government-spending multiplier / tax multiplier. e. monetary policy / fiscal policy / impact of money supply / marginal propensity to consume.arrow_forwardAccording to the Keynesian economists a. the economy will always seek a level of long-term full employment in the long run b. prices should fluctuate based on the wants of consumers c. markets will adjust itself shortages and surpluses d. All of the abovearrow_forward
- According to the Keynesian model, which of the following would increase aggregate demand the most? a. Government drops the taxes for private businesses b. Government establishes a new agency financed by the government that helps the unemployed to find a job Increase in interest rates that results in the growth in investments into new equipment to O d. A decrease in government expenditures accompanied by the decrease in taxes e. Government expands its social projects and increases taxes to balance the budgetarrow_forwardWhich of the following statements of fact about the role of the Canadian government in the economy is MOST consistent with Keynesian economic theory? a. Canadian Crown corporations, such as Canada Post and the Canadian Dairy Commission, are run at a a cost to taxpayers b. The regulation of industry in Canada ensure worker safety standards are met. c. Crown corporations provide competition to the private sector of the economy d. The Canadian government, through the Bank of Canada, can increase or decrease the rate of economic growtharrow_forwardIn the Keynesian framework, which of the following events might cause recession/inflation. Explain using the Aggregate Demand/Aggregate Supply. I only need type of examples that go with the question though. (Examples are crucial please!) a. A large increase in the price of the homes that people own b. Rapid growth in the economy of a major trading partner c. The development of a major new technology offers profitable opportunities for businessarrow_forward
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